Barristers Andrew Fox of 5 Wentworth Chambers and Lucy McGovern of Tenth Floor Chambers discuss Remedies in Intellectual Property with reference to recent case law. Andrew and Lucy gave a seminar presentation on this topic for Legalwise Seminars.
In this article we address three recent patent cases which involved damages awards:
- Generic Health v Bayer  FCAFC 183;  FCA 250;
- Lundbeck v Sandoz  FCA 1797;  FCA 46; and
- Sigma Pharmaceuticals v Wyeth  FCA 1556.
In Bayer, the patentee sought damages of over $25 million for patent infringement for its oral contraceptive ‘Yasmin’ caused by the generic ‘Isabelle’. Lundbeck sought damages for the sales of a generic version of its depression drug ‘Lexapro’. In Wyeth, generics, manufacturers and the Commonwealth claimed on an undertaking for damages for an injunction relating to the patent for antidepressant ‘venlafaxine’, where the patent was later found invalid.
In Bayer, the first instance judge awarded over $25 million damages. That figure was based on a ‘one for one’ calculation, ie. all sales of the generic were those of Bayer. The Full Court reduced the amount, by applying a discount of 2% to reflect a level of uncertainty. As part of the award of damages, the Court took into account ‘price depression’ – ie. that Bayer had introduced its own cheaper generic to prevent market erosion by Isabelle, and allowed damages on that basis for a period of two years after the infringing conduct had ceased.
In Lundbeck, the Court awarded damages for patent infringement of over $26 million, and in doing so applied a discount of 30%. The large discount accounted for the presence of other generics in the market, such that some sales of the infringer would represent lost sales of other generic’s products and not that of Lundbeck. The Court adopted a ‘time shift approach’ by looking at the figures if Sandoz had entered the market in 2013 rather than in 2009 as it had done. The Court awarded damages for a springboard period – ie. a period of time after the infringing conduct had ceased during which time the infringer benefited from an advanced market position.
In Wyeth, the court considered the probabilities and possibilities of a lost opportunity of supply based on a hypothetical scenario, being what the market would have looked like if the generics had not been restrained from entering the market by the operation of an interlocutory injunction. The Court considered the argument that the generics would have listed on the Pharmaceutical Benefits Scheme and/or the private market and the consequence of such a listing. The Court granted damages for a relatively short period of time, being the period that the interlocutory injunction was in operation.
Although the evidence in each case was substantial, and included for example medical practitioners (doctors, pharmacists), financials (economics, accountants), and business personnel (managing directors, marketers), it ought be borne in mind that the Courts are often concerned to focus on contemporaneous records. That was most apparent in Wyeth where the Court emphasised contemporaneous written materials over witness evidence which sought to reconstruct events many years later.
Andrew Fox‘s principal area of practice is intellectual property law, including trade practices. He has appeared in a number of leading cases and appears regularly in the Federal Court of Australia and in patent and trade mark oppositions held at IP Australia. He also has considerable experience in general commercial litigation, having appeared in proceedings before the Supreme Court of NSW, District Court, Local Court and in interstate Courts. Andrew is recognised in Chambers and Partners Asia Pacific as a leading barrister in intellectual property (2018 – Band 1); Doyle’s Guide to Australian Leading Lawyers (2018) and also in The World’s Leading Trademark Professionals (2019). Andrew is also admitted to practice as a Barrister in New Zealand. Contact Andrew at [email protected] or visit 5 Wentworth Chambers.
Lucy McGovern is a barrister of Tenth Floor Chambers. Lucy has advised on a broad spectrum of patent, trade mark, copyright and consumer law disputes including infringement, comparative advertising, product recalls, parallel importation, franchising and pharmaceutical and therapeutic goods. She appears for clients in the Federal Court of Australia, the Federal Circuit Court, Australian Trade Marks Office and Supreme Court. Before being called to the Bar, Lucy was an associate at MinterEllison in the intellectual property team. Contact Lucy at [email protected] or connect via LinkedIn .